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CORPORATE SOCIAL

RESPONSIBILITY AND
FINANCIAL PERFORMANCE: A
CONCEPTUAL OVERVIEW
Corporate Social Responsibility:

CSR is a business approach that contributes to


sustainable development by delivering
economic, social and environmental benefits
for all stakeholders. (Triple Bottom line
Approach)
Evolution of CSR:

CSR mainstreaming
Phase (2000
CSR Momentum Onwards)
building Phase
(1990-2000)

CSR Initiation
Phase (1960-1990)
CSR Initiation Phase (1960-1990):
Environmental issues received prominence
Responsible Companies (Goyder-1960s)
Stakeholders
Ecologically sustainable development
Biodiversity (Early 1980s)

CSR Initiation Phase


(1960-1990)
CSR Initiation Phase (1960-1990):
Principles of Sustainable development
(Brundland Report- Late 1980s)
Models for Social Responsibility Reporting
(1975-1987)
Socially Responsible Investment

CSR Initiation Phase


(1960-1990)
CSR Momentum building Phase
(1990-2000):
Earth Summit (Rio de Janeiro, 1992) lead to
continuous development of Sustainability concepts.
Millennium Development Goals
Environmental awareness
Kyoto Protocol (Decrease greenhouse gas emissions)

CSR Momentum building


Phase (1990-2000)
CSR Momentum building Phase
(1990-2000):
Environmental reports extended to
Sustainability Reports
Social Auditing
Socially Responsible Investing(SRI)- Dow Jones
Sustainability Indexes

CSR Momentum building


Phase (1990-2000)
CSR mainstreaming Phase
(2000 Onwards):

Rio+10 Summit (Johannesburg, South Africa-


2002) {To reflect on the achievements}
Linking CSR with the mainstream strategy and
the management frameworks

CSR mainstreaming
Phase (2000
Onwards)
Companies (Corporate Social
Responsibility Policy) Rules, 2014:
Came into effect from 1st April, 2014.
2% of companys average net profits.
Dimensions of CSR:
Measurement of CSR:

KLD-Global Sustainability Index


Corporate Social Performance Index
Reputational Index
Global Ethical Ratings
Measurement of CSR:

Questionnaire
Scale Development
Content Analysis
Charitable contributions
FINANCIAL PERFORMANCE:

Accounting Market Based


Based Measures Measures
ROA
ROI Dividend Yield
P/E Ratio
ROE
EPS
ROS Tobins Q
CORPORATE SOCIAL RESPONSIBILITY
AND FINANCIAL PERFORMANCE:

Positive Negative No Relation


STUDIES RESULTS
Moskowitz (1972), Bragdon & Martin CSR linked positively to firms financial
(1972), Parket & Eilbirt (1975), Bowman performance
& Haire (1975), Heinz (1976), Sturdivant
& Ginter (1977), Davis (1975), Alexander
& Buchholz (1978), Spicer (1978),
Cochran & Wood (1984), Soloman &
Hansen (1985), Conine & Madden (1987),
Blackburn et al. (1994), Waddock &
Graves (1997), Berman et al. (1999),
Godfrey (2004), Margarita Tsoutsoura et
al. (2004), Orlitzsky (2005), Lopez et al.
(2007), Akpinar et al. (2008), Lev et al.
(2008), Choi et al.(2010), Wang Ho Yin
(2012), Kanwal et al. (2013), Catrina Ghelli
(2013)
STUDIES RESULTS
Vance (1975), Aupperle et al. (1985), Rim CSR linked negatively to firms financial
Makni et al. (2008), Alex Anlesinya et al. performance
(2014)

Fogler & Nutt (1975), Abbott & Monsen No Linkages found


(1979), Fombrun & Shanley (1990), Teoh
& Shiu (1990), Teoh et al. (1999),
McWilliams & Siegel (2000), Maria-Gaia
Soana (2005), Nadeem Iqbal (2012),
Sukanya Chetty et al. (2015),